Private equity is draining British business dry | Nicholas Shaxson

‘Levelling up’ won’t work if companies are asset stripped and profits spirited out of communities

• Nicholas Shaxson is a co-founder of the Balanced Economy Project

While swathes of the economy splutter back to life, desperately attempting to survive after 18 months on life support, not everyone is struggling equally. The City of London is fire-hosing private equity firms with money, spurring them to borrow and buy up corporate Britain at a furious rate. The latest big target is Morrisons, which just agreed a $9.5bn (£6.9bn) takeover offer by the US private equity firm Clayton, Dubilier & Rice (CD&R). It’s not the first supermarket chain to have caught the attention of private equity tycoons: Asda took a big private equity investment last year from TDR Capital, alongside the Issa brothers.

But private equity’s appetite goes far beyond supermarkets. In the first half of 2021 there were 785 private equity deals in the UK with a combined value of almost £74bn, according to KPMG. Telecoms, business services, IT, veterinary services and even children’s social care have all caught the eye of investors hungry for cut-price acquisitions. “Private equity is rampant,” said Martin Sorrell, the influential advertising boss. “They are the dominant force now.”

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from The Guardian https://ift.tt/3kynkV3